Net Neutrality Rift Reaches Epic Proportions

WASHINGTON—The president and his man in charge of the Federal Communications Commission this week split the sheet on net neutrality. On Monday, President Obama called for the federal reclassification of broadband networks to make regulating them less of a legal minefield.

“I’m asking the FCC to reclassify Internet service under Title II of the law known as the ‘Telecommunications Act,’” Obama said in a YouTube video Monday morning. (The video is posted below.)

Hours later, The Washington Post reported that FCC Chairman Tom Wheeler told a room full of executives from Yahoo!, Etsy and Google—a driving force behind network neutrality—that he was taking a different approach. He was quoted as saying, “I am an independent agency,” which then spawned a life of its own on Twitter.

Then events took a turn into the truly theatrical turn when video surfaced of protesters blocking the driveway of Wheeler’s home earlier that day. Three women sat behind Wheeler’s Mini Cooper and told him they wouldn’t let him go to the office because he wasn’t working for “the people.” Wheeler, former chief lobbyist for both the wireless and the cable TV industries, played along for a while until he realized they really weren’t going away.

Obama’s Title II pitch video had just 673,000 hits by Wednesday, but word spread fast that the chief executive was coming down hard in favor of net neutrality. Internet Service Providers are now regulated as Title I information services. Title I provides the FCC with “ancillary” jurisdiction over wired and wireless services. Title II designates common carrier services and provides the FCC with more explicit regulatory authority.

Under Title II, the commission ostensibly could impose network neutrality, the concept that ISPs should keep their mitts off the bits on their own networks. Network neutrality emerged as an issue in 2007 after Comcast was caught throttling BitTorrent. The FCC ordered Comcast to stop. Comcast sued in federal court and won 3-0 in 2010. The FCC then tried to push a set of voluntary tenants to prevent throttling—the practice of an ISP limiting the bitrate of an online content provider. A rulemaking to codify network neutrality followed and essentially languished until last May when Wheeler proposed modified rules that would allow ISPs to create “fast lanes” for bandwidth hogs.

A groundswell of objection ensued. Nearly 4 million comments have been filed on the FCC’s net neutrality docket, most of them objecting to the fast-lane approach. While the Title II reclassification would give the FCC the authority to regulate ISPs however it sees fit, getting there is another story. Verizon and AT&T immediately manned the cannons.

“Reclassification under Title II, which for the first time would apply 1930s-era utility regulation to the Internet, would be a radical reversal of course that would in and of itself threaten great harm to an open Internet, competition and innovation,” Verizon said in a statement on its public policy blog. “That course will likely also face strong legal challenges and would likely not stand up in court.”

AT&T took a different tack and demonstrated a capex chokehold. According to several published reports, AT&T CEO Randall Stephenson said it was reeling in the fiber roll-out until the issue is settled.

“We can’t go out and invest that kind of money deploying fiber to 100 cities not knowing under what rules those investments will be governed,” he is reported to have said at an analyst conference.

The cable lobby, the National Cable and Telecommunications Association, was blindsided.

“We are stunned the president would abandon the long-standing, bipartisan policy of lightly regulating the Internet and calling for extreme Title II regulation,” said NCTA President Michael Powell, a former FCC chairman who supported the voluntary approach. “We will fight vigorously against efforts to impose this backwards policy.”

Network neutrality is being likened to buggy whips, looms and plumbing, in what may be a cleverly disguised campaign to demonstrate that no one knows what "network neutrality" is. For the time being, it's the monkey wrench in the gears of telecom reform. Network neutrality legislation would prevent broadband service p